More Stories

Informist, Tuesday, Aug. 5, 2025

By Simran Rede

MUMBAI – Benchmark indices are likely to fall further Wednesday ahead of the monetary policy outcome of the Reserve Bank of India, due Wednesday at 1000 IST. The threat by US President Donald Trump to "substantially" raise tariffs on India in the next 24 hrs will also weigh on the market, analysts said.

Analysts are divided on the policy rate outcome. Some believe the central bank will keep the repo rate steady at 5.50% Wednesday, while others expect a 25-basis point cut. The RBI may not cut the key interest rate in this policy meeting, but there is room for a 25-50 bps cut by the end of this year, head of research at a domestic broking firm said. He expects the central bank to maintain its GDP growth forecast and sees no reason to cut it on the back of "good trajectory" in underlying purchasing managers' index.

Earlier, the RBI was widely expected to keep the repo rate unchanged at 5.50% in its August meeting. However, new tariff threats from Trump over India's continued imports of Russian oil have added to the rise in bets of the Reserve Bank of India's Monetary Policy Committee cutting the repo rate by 25 bps on Wednesday.

On Tuesday, the Nifty 50 closed at 24649.55 points, down 73.20 points, or 0.3% and the BSE Sensex ended at 80710.25 points, down 308.47 points, or 0.4%. The 50-stock index is expected to face resistance at 24750-24800 points and find support at 24550-24500 points. "The Nifty is hovering around its 100 DEMA (double exponential moving average), trend is still negative and we maintain sell on rise trading approach till it is trading below 25000 spot levels on closing basis," Vipin Kumar, assistant vice-president and senior derivatives analyst at Globe Capital Market, said.

The Nifty 50 is seen moving in a range in the near-term, however, a pullback of 2-3% cannot be ruled out, Pravin Bokade, head of research at IDBI Capital Markets & Securities, said. The negative sentiment about US tariffs and signalling from the US administration will still weigh on the domestic equity market, he said.

"In the last one year, investors have got flat to no returns from their investments in India, while global markets are doing well," Bokade said. The US has given better returns as compared to Indian securities and the depreciation of the rupee has also shifted out the investor from the Indian equity market, he added. The rupee has depreciated by over 4% in the past year. 

Foreign investors have been continuously selling Indian equities for the past 10 consecutive sessions till Monday. They have sold over INR 310 billion over this period.

On the earnings front, the June quarter earnings so far have been a mixed bag. The earnings of banks are impacted and have not picked up due to pressure on the net interest margin after the 'jumbo' repo rate cut of 50 bps in the last monetary policy meeting. Further, earnings of information technology companies were also muted as clients delayed spending on the IT-related services due to tariff uncertainties.

The June quarter earnings showed continued weakness in consumption, muted demand for IT services and weak loan growth for banks. Consumer companies saw weak volume growth in the reporting quarter as the increase in raw material prices has further dented profitability. These companies have continued to attribute weak urban demand and increasing competitive intensity behind the weak volume prints, Kotak Institutional Equities said in its strategy report. However, consumption is expected to improve in the coming 1-2 quarters, Bokade of IDBI Capital Markets said.

Wednesday, three companies, which are a part of the Nifty 50, are scheduled to report their June quarter earnings--Bajaj Auto, Hero MotoCorp, and Trent. Bajaj Auto is seen rising Wednesday with key support at INR 8,000 and resistance at INR 8,475, Kumar of Globe Capital Market said. The stock closed 0.5% higher at INR 8,230.50. Hero MotoCorp is also likely to rise with support seen at INR 4,400-INR 4,360 and resistance at INR 4,675. It closed at INR 4,546.80, up 0.2%. The resistance and support level for Trent is pegged at INR 5,500 and INR 5,160-INR 5,080, respectively.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.